The Holidays are over and you may have depleted your savings accounts or used credit to finance your Christmas shopping. You may be asking, now what? Well to answer that let’s rewind a little bit and talk about overspending and why we tend to do it, especially during the holidays.
Did you overspend?
I’ve been there way too many times, but this year I followed what I’m laying out for you today.
Take a second to think about why you may have overspent. Overspending tends to occur for a variety of reasons.
- Not having a budget. Seriously, two-thirds of Americans do not have a budget. Why is that? What’s stopping them?
- Impulse. Impulse buying is in a lot of ways psychological Did you know those end caps in the stores are strategically placed? Usually, the items on the end caps are things you can find within the aisles really quickly, but have you taken a minute to notice those items are usually on “sale”?
- Emotional. Yes, emotional. Just take a second and channel your inner Don Draper. Companies spend billions on ad guys to do market research and create the perfect ad that will convert.
- Instant gratification. Whether you are out and about or bored often times overspending happens due to our need for instant gratification. Whether it’s food or a new toy it makes us think we are happy right now, at this moment.
- Keeping up with the Jones’. Do you have someone in your life you’re trying to impress or compete with?
- Using credit cards. “A new Gallup Poll shows that just over half of Americans have at least one credit card on which they do not pay off the full amount due each month, thus essentially using it for a short-term loan.”
- Thinking you got a deal. Have you been on Amazon lately? They have a hugely popular daily deals tab. Heck, they even bought out Woot, which is a daily deals site.
- Rewarding yourself at the wrong times. Rewarding yourself at the wrong times can lead to spending money you may not have. Make sure if you’re rewarding yourself you evaluate why and check your budget first.
- Under estimating your expenses. All too often people only think in terms of how much they bring in and not how much is going out.
- Thinking it’s normal to have debt.
So now that you know what some of the causes of overspending are you can move towards fixing it in the future.
So what do you do now?
- You have to start with setting up a plan for your income and expenses. In simple terms, it’s called a budget. You can learn all about that by joining my free email course here.
- Cut back on the entertainment. You can find so many ideas out there for no spend or budget-friendly entertainment. You can find some good ideas here and here.
- Assign every dollar in your bank account a home. Don’t let it just sit in your checking account ready for you to swipe your debit card.
- Set financial goals, both short and long-term.
- Remind yourself how much time you will have to put in to earn that money back that you want to spend. If you make 20 dollars per hour, how long will you need to work to earn that back?
- Training yourself to not be impulsive. Yes, this is hard but it can be done. For years I’ve given myself permission to shop on apps on my phone, however, I’ve never signed up for those companies in order to put my credit card information into the app. It’s like window shopping, but without the ability to buy.
Start your new year off right and kick the tendency to overspend to the curb. Putting these actions in place now can put you on a path to being prepared for the Holiday season next year. Save often and save early. I plan out my months in advance so I can see what’s coming up and where the money for those events need to come from.
You can take my free email course here on creating a financial plan for your family.
Fire off in the comments below and tell me how you get control of your budget and avoid overspending.
Until next time.
Do You Want To Take Control of Your Finances?
Set financial goals for your family that you can finally stick too with my free family budgeting email course.